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To kick off our commonly asked questions series, let’s start with the barrier to entry for every new person to crypto and those with minimal familiarity. How do I buy my first Decred?
This is difficult to answer because ideally, you’ll be using the DCRDEX P2P exchange and holding your coins in its self-custody wallets. But for new users, there are probably too many steps, which can be very daunting.
From recent surveys, it would also appear, the majority of new crypto users prefer to buy crypto using mobile exchanges and wallets. For this reason, if I was new to the space and wanted to buy my first Decred, I would likely use the Binance app. Then self-custody the coins in a Decred wallet. As a rule of thumb, mobile wallets are good for small holdings and the Decrediton desktop wallet is best for large, long-term holdings.
The current mobile options include the Trust wallet and the Exodus wallet. Within a few months, hopefully, we can add the excellent Cake wallet to this list.
As a secondary note, although we are going to use a centralised exchange for this demonstration, it’s good practice to not store your funds on these services. It’s also good practice to buy and sell small amounts until you become confident with the systems you’re using.
The simplest way to buy Decred
The simplest route to buy Decred is using the centralised exchange Binance, which currently has two Decred DCR pairs (Bitcoin BTC and Tether USDT). Your first task is to set up Binance and move funds from your bank account to your new Binance account.
Once your account has your fiat funds, you’ll need to buy either Tether USDT or Bitcoin BTC. Once you’ve made this conversation, you can then use these funds to buy Decred DCR.
After you’ve bought your Decred, I would recommend moving your dcr to a self-custody wallet (Decrediton or Mobile option). Especially, if you don’t intend to sell your new coins. Once again, the best and most secure, self-custody wallet for Decred is Decrediton. Also, Because you’ll be holding your own coins, don’t forget to back up your seed phrase and store it safely, when you’ve set up this wallet.
To recap, the steps needed to buy Decred using Binance:
- Create a new account on the Binance exchange app
- Transfer fiat funds (e.g. GBP, USD, EURO) from your bank to your Binance wallet
- Use your fiat funds to buy BTC or USDT
- Use your BTC / USDT to buy Decred DCR
- Move your DCR to a self-custody wallet
To my knowledge, Binance is currently the simplest way of getting in and out of Decred for people that have no experience with crypto. But it’s worth checking before you sign up that your country's fiat currency is accepted by the exchange.
When it comes to buying your first crypto, centralised exchanges are dominant fiat on and off ramps. And although there are other options for getting from fiat to crypto, these do tend to be more risky with lower liquidity and higher associated fees. However, once you have crypto, the options become a lot better. To the point where it’s more cost-effective and efficient to use a decentralised exchange to move from crypto to crypto than it is to use a centralised exchange.
Currently, I see this as a two exchange process. Whenever fiat currencies are needed, use a centralised exchange and get your funds off as quickly as possible to reduce risk.
But when you’re moving from crypto to crypto, decentralised options offer greater privacy and also reduced risk. For Decred trades, the best current option is the DCRDEX P2P exchange. Which I would recommend once you’ve built up your holdings of coins like Decred, Bitcoin and Litecoin.
As we move forward, hopefully, this situation will change and improve. I’d also be interested in your views on this subject and how you buy and sell crypto, especially if you have better, simpler solutions?